Industry 4.

0 And It Effects Toward Industry

Mohd Shazwan Bin Dahlan

Politeknik Muadzam Shah
E-mail: shazwan@pms.edu.my

Liyana Binti Sani

Politeknik Muadzam Shah
E-mail: liyanasani@pms.edu.my

Muhammad Faiz Bin Jansar

Politeknik Muadzam Shah
E-mail: faiz.jansar@pms.edu.my

Abstract
Many of the world’s leading industrial nations have invested in national initiatives to
foster advanced manufacturing, innovation, and design for the globalized world. Much of
this investment has been driven by visions such as Industry 4.0, striving to achieve a
future where intelligent factories and smart manufacturing are the norm. In this paper
will discuss on definition of industry 4.0 and the distribution of the manufacturing
system attribute for the Industry 4.0. Manufacturing system attributes to the Industry
4.0 can be said as nine advances in technology. From Economic Planning Unit (2015) in
Eleventh Malaysia Plan, which is a five-year comprehensive blueprint prepared by the
Economic Planning Unit (EPU) of Malaysia, the government aims to raise productivity
and reduce dependency on inputs from capital and labour. The conceptual Industry 4.0
has a high impact and wide range of change to manufacturing processes, outcomes and
business models. It allows mass customization, increase of productivity, flexibility and
speed of production and improvement on quality product. Although Industry 4.0 have
several disadvantages, some of its can be minimize and can be prevent. The ideas to
minimize the disadvantages are predictive maintenance, upgrade the security data, and
smart monitoring.

Keywords: Intelligent factories, Smart manufacturing

1. What is the industry 4.0?
Industry 4.0 is a vision of smart factories built with intelligent cyber-
physical systems as stated by Thames and Schaefer (2016). Meanwhile,
Calero Valdez et al. (2015) clearly state that Industry 4.0 is describes a
paradigm shift in production technology. But, Lu (2017) states there is no
unanimously adopted definition of Industry 4.0 through his study which
summarized 18 numbers of publications since 2011 to 2016. Previously,
Industry 4.0 was launched by Germany as a strategic initiative to take up
a pioneering role in industrial IT which is currently revolutionizing the
manufacturing engineering sector. According to Qin, Liu and Grosvenor
(2016), Germany provides a Research and Development funds to
industrial development by hoping the industrial technology to grow
rapidly.
Today, Industry 4.0 can be said that it is the ending point for traditional
centralized application of production control. This is due to the advances
in digitalisation and the internet, “smart manufacturing” and “smart
factories” are becoming a reality, where the manufacturing value chain in
the physical world can be integrated with its virtual copy in the
cyberspace through Cyber-Physical Systems (CPS) and Internet of Things
(IoT), and then be seamlessly integrated with Internet of Services (IoS).
That advancement, which is known as Industry 4.0, was proposed and
launched in 2013 required 10-20 years in practice for achieving full
capability to organize production in conformity with the Industry 4.0
concept, especially by the small and medium-sized enterprises (SMEs) as
stated by Zawadzki and Zywicki (2016).
Cyber-physical systems (CPS) are enabling technologies which bring the
virtual and physical worlds together to create a truly networked world in
which intelligent objects communicate and interact with each other. The
deployment of CPS in production system creates what has been called a
"smart factory". Within the modular structured smart factories, CPS
monitor physical processes, create a virtual copy of the physical world
and make decentralized decisions. Over the IoT, CPS communicate and
cooperate with each other and with humans in real time, and via the IoS,
both internal and cross-organizational services are offered and used by
participants of the value chain.
Smart factory products, resources and processes are characterized by
CPS that can provide significant real-time quality, time, resources, and
cost advantages in comparison compared to the traditional production
systems. According to Zawadzki and Zywicki (2016), they state that in
future, companies that implement the concept of a smart factory will
become leaders in the manufacturing field. In addition, according to
Thames and Schaefer (2016), the goal of Industry 4.0 is to achieve a
higher level of operational efficiency and productivity, as a higher level of
automatization. Figure 1 shows the requirement and necessary elements
needed in order to achieve the mass customization through industry 4.0
which is also known as smart factory Zawadzki and Zywicki (2016).
Saldivar et al. (2015) conclude the design principles of industry 4.0
components are as shown in Table 1. It is clearly shown that, smart
factory is the most significant components in industry 4.0 due to the four
design principles.

2. What will be the manufacturing system attribute for the industry

4.0?
Manufacturing system attributes to the Industry 4.0 can be said as nine
advances in technology as stated in the study of Rüßmann et al. (2015).
Many of the attributes are already been used in the manufacturing
system and are simplified in the Table 2. Correspondingly, it can be said
that one of the most important characteristic of the manufacturing
system in Industry 4.0 are autonomous and well-driven. This is support
by Lee, Bagheri and Kao (2015) study that categorized the three
components of Industry 4.0 in Table 3 which clearly pointed out the
attributes and technologies differentiation between the current factory
manufacturing and Industry 4.0 manufacturing system.
The traditional production line aims to produce the single type of
products meanwhile the smart factory production system aims to process
multiple types of products. This statement is agreed by Wang et al. (2016)
that clearly outline the differences of key features for the smart factory
and traditional factory. From Table 4, it is also shown the features of
Industry 4.0 production system are consist of six components which can
also be defines as the characteristics of Industry 4.0.

3. What are the current stages of Malaysia Industries?

From Economic Planning Unit (2015) in Eleventh Malaysia Plan, which is
a five-year comprehensive blueprint, the government aims to raise
productivity and reduce dependency on inputs from capital and labour.
One of the important solutions is to raise industrial productivity, where
there will be greater adoption of automation and upgrading of skills. The
role of industrial associations will also be further strengthened to deal
with global competition through smart partnerships with other industrial
associations in target export markets.
Automation and robotic industry in Malaysia has been implemented since
1983 by ex-prime minister Tun Dato' Seri Dr Mahathir bin Mohamad
when he introduced the national car manufacturer, Proton, that was first
established as the sole national car company until the advent of Perodua
in 1993 . Despite the long involvement of automation and robotic in
manufacturing, the idea of Industry 4.0 in Malaysia is mostly influenced
by foreign companies such as KUKA and ABB. Very large manufacturing
companies and multinational groups already consider this topic as very
important. Small and medium enterprises (SME) do not yet appear to
consider industry 4.0 to be of great relevance to them, although these
companies are most likely to be the big winners from the shift. SME
companies are often able to implement the digital transformation more
rapidly because they can develop and implement new IT structure from
scratch more easily. Very large manufacturing companies and
multinational groups, by contrast, have more complexity to deal with in
terms of their existing, organically grown structures as stated by Bahrin
et al. (2016).
Malaysian government agencies have come up with several initiatives to
encourage the adoption of latest technology to local industry. The
Malaysian Industry-Government Group for High Technology (MIGHT) is
introduced to address the country’s needs in response to the effects of
globalization and trade liberalization on future economic growth through
the accelerated use of high technology. Under this initiative, programs
and activities will include building strategic partnerships and alliances,
technology acquisition and nurturing, capacity building as well as
strengthening the growth of these sectors through policy interventions
and flagship programs. Malaysia aims to be at the forefront of the next
generation of advances in science and technology through the newly set-
up Global Malaysia-Korea Robotics Collaboration and Development
Program where both parties have agreed to exchange robot human capital
development programs, to undertake robot standardization cooperation,
to launch robot exhibition and international cooperation as stated in
press release (2014). MIMOS, which is Malaysia's national R&D center in
ICT, are doing collaboration with China on research and development on
smart manufacturing technology Laurence Sebastian (2015).
Therefore, the development of automation and robotic industry has the
potential to lead Malaysia towards industry 4.0 through key initiatives by
government and industry player alike.

4. What will be the positive and negative impact of Industry 4.0 to

Malaysia?
The conceptual Industry 4.0 has a high impact and wide range of change
to manufacturing processes, outcomes and business models. It allows
mass customization, increase of productivity, flexibility and speed of
production and improvement on quality product.

4.1 Positive impact

This mass customization will allow the production of small lots even as
small as single unique items due to the ability of rapidly configure
machines to adapt to customer-supplied specifications and additive
manufacturing. This flexibility also encourages innovation, since
prototypes or new products can be produced quickly without complicated
re- tooling or setup of new production lines. Thus it can produce one
product and many variants, with a decrease in inventory by using
Industry 4.0 technologies as stated by Schmidt and Möhring (2015).
Gruber (2013) stated that the speed with which a product can be
produced also improved where digital designs and virtual modelling of
manufacturing process reduce the time between the design of a product
and its delivery. In Germany, data-driven supply chains can speed up the
manufacturing process by an estimated 120% in terms of time needed to
deliver orders and by 70% for the time to get products to market.
Integrating product development with digital and physical production has
been associated with large improvements in product quality and
significantly reduced error rates. Data from sensors can be used to
monitor every piece produced rather than using sampling to detect errors,
and error-correcting machinery can adjust production processes in real
time. This data can also be collected and analyzed using 'big data'
techniques to identify and solve small ongoing problems. The rise in
quality plays an important role in reducing costs and hence increasing
competitiveness as stated by Bahrin et al. (2016). According to Sommer
(2015), the top 100 European manufacturers could save the costs of
scrapping or reworking defective products if they could eliminate all
defects.
Productivity can also increase through various Industry 4.0 effects. By
using advanced analytics in predictive maintenance programs,
manufacturing companies can avoid machine failures on the factory floor
and results in downtime cut and increase production as stated by
Almada-Lobo (2016). Some companies will be able to set up 'lights out'
factories where automated robots continue production without light or
heat after the staff has gone home. Human workers can be used more
effectively, for those tasks which are really important.

4.2 Negative impact

It is very important to recognize and evaluate the economic effects of
Industry 4.0, the digitalization of the production processes. These
developments involve considerable challenges at the enterprise and at the
political level. Challenges which have been identified include Mosterman
and Zander (2016). The consequences by implementing Industry 4.0 as
stated:
i. IT security issues.
ii. Reliability and stability needed for critical machine-to-
machine communication (M2M), including very short and stable
latency.
iii. Need to maintain the integrity of production processes need
to avoid any IT snags, as those would cause expensive production
outages.
iv. Need to protect industrial knowhow (contained also in the
control files for industrial automation gear).
v. Lack of adequate skill-sets to expedite the march toward the
fourth industrial revolution.
vi. Threat of redundancy of the corporate IT department General
reluctance to change by stakeholders.
vii. Loss of many jobs to automatic processes and IT-controlled
processes, especially for lower educated parts of society
Perhaps the most challenging aspect of implementing Industry 4.0 is the
IT security risk. Industry 4.0 will require on-line integration among
several entities, and this online integration will give room to security
breaches and data leaks. Cyber theft would be another dangerous threat.
In this case, the problem is not individual, and this will cost
manufacturers substantially and might even hurt their reputation.
Therefore, security is a crucial issue that should be dealt with seriously.
The transformation to Industry 4.0 will require large investments in new
technology, and the decision for such transformations will have to be
taken at the CEO level. Even then, the risks must be calculated and
taken seriously. While it is still early to speculate on employment issues
with the advent of Industry 4.0, it is safe to accept that workers will need
to acquire different or an all-new set of skills. As stated by Tupa, Simota
and Steiner (2017). This may help employment rates go up, but it will also
alienate a big sector of workers. The sector of workers whose work is
perhaps repetitive and routine will face a stiff challenge to keep their jobs.
New and quite different educational systems must be introduced, but this
still does not solve the problem for older workers. This is an issue that
might take quite a long time to solve.
The last impact is privacy is not only the customer's concern, but also the
manufacturers as stated by Mosterman and Zander (2016). In such an
interconnected Industry 4.0 network, manufacturers need to collect and
analyze a huge quantity of data. To the customers, this might look like a
threat to their privacy. Narrowing the gap between the consumer and the
manufacturer will be a huge challenge for both parties.

4.3 Critical Thinking

The Fourth Industrial Revolution has been talking a lot nowadays. New
technologies are appearing every day. Only think of artificial intelligence,
3D printing, Big Data, augmented reality, nanotechnology, autonomous
transport, Internet of Things, machine learning and robotics. These were
the implication of the Fourth Industrial Revolution.

4.3.1 Manufacturing jobs change

As the world going to technologies, the manufacturing industry also has
changing and it is changing quickly. Dirty and simple jobs in factories
disappear, while new positions seem to pop-up every day. As the industry
revolved into automated system, the need of a maintainer is become
necessary as also as programmer that is highly needed in Fourth
Industrial Revolution. Nanotechnology and artificial intelligence have to
be explored further to be used in manufacturing; means that more
researchers is needed. As for that, one thing is clear; manufacturing jobs
are definitely changing.

4.3.2 Skills
As the industry is changing rapidly, we need to change fast as well.
Continuously learning and gaining new knowledge is necessary for a
career in manufacturing. Also, complex problem solving, critical thinking
and creativity are three of the most important skills in Fourth Industrial
Revolution. These important skills are necessarily to be taught at
institution. To prepare students and adolescents for a job in
manufacturing or in any branches and needed to focus on ‘learning to
learn’, next to addressing new skills. In this way youngsters will be able to
occupy jobs that do not exist yet.

4.3.3 Different strategy for manufacturer

As the manufacturing industry changes, the way companies produce is
changing too. Whereas offshoring has been a good strategy for decades,
new technologies make it more attractive to reshore production.
Reshoring is just one strategy that manufacturers can follow to keep up
with Industry 4.0.
In addition, hiring women and encouraging them to take a job in
manufacturing, is a good strategy. Integrating Information Technology
and increasing the cooperation between IT and Operation Technology, will
help the supply chain to gain value. Using the power of Big Data is also a
strategy that helps to become ready for the future of manufacturing.
These are only a few strategies that manufacturers can adapt to remain
competitive.

4.3.4 Information technology

Network readiness is one of the important pillars of future
competitiveness and well-being in manufacturing. As innovation is
increasingly based on digital technologies, new business models need to
be developed. Network readiness, as stated in The Network Readiness
Index 2016, refers to overall environment, readiness in terms of
infrastructure, affordability and skills, and usage by individuals,
businesses and the government. In order to become ready for the future
of manufacturing, countries should consider all these factors and improve
on them where necessary.

5. How disadvantage can be minimizing?

Although Industry 4.0 have several disadvantages, some of its can be
minimize and bee prevent. The ideas to minimize the disadvantages are
predictive maintenance, upgrade the security data, and smart monitoring.

5.1 Predictive Maintenance

Predictive Maintenance describes foresighted maintenance of a production
process with the help of intelligent data analytics. Machines, products
and components of the systems involved in the process are cross-linked.
The goal is to detect suspicious patterns indicating malfunction early
enough to initiate the appropriate preventive measures. Impending errors,
breakdowns and resulting downtimes in the production process can thus
be detected in time and the appropriate maintenance can be initiated.
Predictive Maintenance is an important component in a 4.0 environment
and is a further development of established maintenance strategies. With
the right choice of systems, the generation and preparation of the correct
data, as an appropriate mix of industry expertise and data analytics, the
success of a Predictive Maintenance solution is guaranteed.

5.2 Upgrade the Security Data

Every day, business systems generate huge amounts of data, which,
hover, is only in part processed and analysed. In the field of security, it is
processed with software relating to the topic of SIEM (Security
Information and Event Management). Conventional SIEM solutions are
usually used for the analysis of log files. For this purpose, rules reacting
to known events are defined. Hover, by implication, this means that they
cannot react early enough to undefined anomalies and events. SIEM
systems are normally restricted to infrastructural events, and only
provide limited support in making decisions.

5.3 Smart Monitoring

Constantly monitoring the IT environment with a Smart Monitoring
solution allows an early detection of critical statuses in your server
systems, services and their applications. The operation of complex IT
infrastructures requires the employment of professional equipment and
experts to supervise the systems. A malfunction of business-critical
applications inevitably leads to economic losses. With the graphical user
interface, events can be pursued, searched and filtered. Notifications can
be transmitted in real-time via SMPT, SNMP, Syslog or HTTP POST.
Admins have the possibility to filter the results according to event, date or
IP address. Only data matching the admin’s field of duty is displayed.
Third-party companies can also send messages to SIEM tools.

5.4 A framework for Industry 4.0

In Industry 4.0 machines are starting to support humans to make
decisions and do work in areas too hazardous, or with tasks too complex.
Four ingredients combined bring Industry 4.0 that is instrumented,
interconnected; inclusive and intelligent (refer Figure 2).

5.4.1 Instrumented
The devices carry around generate data; the cars that drive generate data.
The exercise and sleep monitors generate data. More and more of the
products and services interact with will be generating data. That’s on top
of the data generate ourselves with all our status updates, posts, videos,
photos and more awash with it. It’s getting quicker too. The speed with
which the data gets from chips to analytics is accelerating as Texas
Instruments and ARM have found working with IBM. All that data is no
use unless it’s moved somewhere it can be analysed. That could be where
it originates, in a cloud, or both such as IBM’s BlueMix – all that data
needs somewhere secure to go.

5.4.2 Interconnected
Apple’s latest OS updates included Siri, the interface you can talk to;
Google’s Home and Amazon’s Echo all make it easier for us to talk to our
connected devices and for them to do things– including answer back.
There are clouds that hold our information and process it, and fog
computing’ that does what clouds do – but on the ground at the edge of
the network’ as IBM and Cisco do.
There are also platforms to help process the information, like the Watson
IoT Platform. If you’re familiar with ‘The Hitch Hiker’s Guide to the
Galaxy’s’ ‘Babel Fish‘ or Star Trek’s ‘Universal Translator’, these platforms
provide a place to receive the data, translate it into a common format that
the computing ‘brains’ can work with, and pass back the results and
insight.
Those standards are important too. With such a variety of development
happening at speed, there’s always the chance of another ‘betamax’ or
‘VHS’ showdown. Companies need to agree and conform to standards
such as ASPICE, ISO 26262 and many others to ensure that all continue
to talk the same language.

5.4.3 Inclusive
Do you have an alarm that knows that the weather is going to be bad?
That the bad weather will jam up the traffic. As a result of that jammed
traffic, your journey take longer, so your alarm gets you up a little earlier
so that you’re not late for work? This is an example of a three of data sets
(weather, traffic and maps) that working together with a device (your
alarm clock) can anticipate a need for you and change your environment
to accommodate for it. Applying data from one place such as the weather
Company to another can make a significant difference, and keep you on
time for the office.

6. Conclusion
Currently, Industry 4.0 is a popular term to describe the imminent
changes of the industry landscape, particularly in the production and
manufacturing industry of the developed world. Yet the term is still used
in different contexts and lacks an explicit definition. Especially for
companies in the western automotive, machine and plant industry it will
be important to offer customized products that are superior in quality and
competitive in price. This can be achieved by intelligent automation and
reorganization of labour within the production system. In the near future,
labour work will change in content but will still remain irreplaceable,
especially in view of customization resulting in an increasing need for
coordination. Operators on the shop-floor need to be skilled in decision
making as the separation of dispositive and executive work voids. Self-
controlling systems communicate via the Internet and human, which
alters the role of workers towards coordinators and problem-solvers in
case of unforeseen events. But the main question were to be ask; is
Malaysia industry were prepared to involved in Fourth Industrial
Revolution. A big preparation and consequences needed to be considering
has been discuss before.

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Appendix

Figure 1. Realization of Mass Customization through Industry 4.0

Zawadzki and Zywicki (2016)

Table 1. Design Principles of Industry 4.0 Components.

Lidong Wang, Guanghui Wang (2016)
 Table 2. Characteristic of Industry 4.0. Rüßmann et al.(2015)

No. Attributes Discussion

The collection and comprehensive evaluation
of data from many different sources such as
Big Data and
1. production equipment, company and
Analytics
customer management systems are standard
to support real-time decision making.
Robots are evolving for even greater utility by
becoming more autonomous, flexible, and
cooperative. The interaction beten robots and
2. Autonomous Robots
human are more efficient. These robots cost
less and have a greater range of capabilities
than those used in previous manufacturing.
Simulations used in plant operations are more
extensively. Real-time data to mirror the
physical world in a virtual model are leverage
3. Simulation
and allows operators to test and optimize the
machine settings for the next product before
the physical changeover.
Departments, functions, and capabilities are
Horizontal and
much more cohesive, as cross-company,
4. Vertical System
universal data-integration networks evolve
Integration
and enable truly automated value chains.
Most manufacturing devices enriched with
embedded computing and connected using
standard technologies. This allows field
The Industrial devices to communicate and interact both
5.
Internet of Things with one another and with more centralized
controllers, as necessary. It also decentralizes
analytics and decision making, enabling real-
time responses.
The need to protect critical industrial systems
6. Cybersecurity and manufacturing lines from cybersecurity
threats increases dramatically due to the
 increased connectivity and use of standard
communications protocols. So, secure, reliable
communications as well as sophisticated
identity and access management of machines
and users are essential.

Production-related undertakings require

increased data sharing across sites and
company boundaries. At the same time, the
7. The Cloud performance of cloud technologies will improve
and achieve reaction times of just several
milliseconds.

Additive-manufacturing methods are widely

used to produce small batches of customized
products that offer construction advantages,
Additive
8. such as complex and lightight designs. High-
Manufacturing
performance in decentralized additive
manufacturing systems reduce transport
distances and stock on hand.
Augmented-reality-based systems support a
variety of services, such as selecting parts in a
warehouse and sending repair instructions
over mobile devices. Companies will make
9. Augmented Reality
much broader use of augmented reality by
providing workers with real-time information
to improve decision making and work
procedures.

Table 3. Comparison of Attributes and Technologies.

Lee, Bagheri and Kao (2015)

Table 4: Technical Features of Smart Factory Compared with Traditional

Production Line. Shiyong Wang, Jiafu Wan, Chunhua Zhang (2016)
Figure 2. A framework for Industry 4.0. Scott Stockwell (2017)